Originally Posted by
Deano969
1st route announced MCY-PPP by end of this month
Tourism Data has that market around 20k passenger movements per year, that is taking into account only the Sunshine Coast + Whitsunday catchment. I don't think it's overly necessary to include any Brisbane catchment, they have a low cost daily option + 2 non-lcc options on the route which will suck up that catchment. But, if you combine both BNE and MCY catchments, Bonza will only hold a 14% market share. Parking your car a the airport for a week, will cost you $70 per week more if you park at the Sunshine Coast, further pushing away any Brisbane catchment opportunities.
Bonza will need to heavily stimulate the market for that route to become viable, they are offering 29016 seats per year. Forecasting a ULCC CASK 9c, EBIT margin 10%, they would need to charge $295 per seat to make budget, going off current traffic that does not drive, take into account these intrastate routes are very 4WD/SUV trips. Assuming they can stimulate the market, 90% LF, 9% Margin, $110 Fare is required. Stimulating will also require burning margin, so will be a challenge charging such fares.
This route will certainly pose a challenge for Bonza with such a dense aircraft. Stimulating any market like this required lower fares and likely negative EBIT.
The same challenges appear on a few other routes, Toowoomba-Whitsunday Coast very similar in the data without boring everyone. However, the most concerning and challenging is the some intrastate Rockhampton proposed routes. Most require very very significant market stimulation, the traffic does not overly exist at the moment, that is the past data only, unknown how Bonza will stimulate these regions. The question is, how long does Bonza wait burning margin trying to stimulate a market.